Fannie Mae-No Politics (FNMA)

[Possum336]

The scenarios of the GSE's and AIG situations are strikingly similar. The government will get their pound of flesh from the common holders just like in AIG but the preferred will be paid in full just like the pre existing preferred from AIG, national city bank, Citi, Bear Stearns, Merril Lynch, Countrywide and all of the others that were merged and not liquidated. Even the preferred from Indymac got a payout from liquidation and the common did not. It is truly an uninformed position to assume that the common stocks will receive anything before the preferred holders are satisfied. The country is dependent on the GSE's to maintain stability in the housing sector and they will be around for a long long time.